In the UK and Ireland, spread betting is popular as traders’ gains are free from taxes and stamp duty. In this context, adding spread bets is an excellent opportunity for FX and CFD brokers looking to expand and diversify their audience.
That’s especially true when it barely requires any effort to enable this instrument in a broker’s trading platform. A great example is DXtrade—a Forex/CFD trading platform by Devexperts.
To understand the benefits of adding spread bets, let’s first discuss what it is and how this type of trading works.
Understanding Spread Bets
To cover the basics, let’s start with defining spread bets.
Spread bets have two prices: bid and ask. A trader can buy for the bid price and sell for the ask price. The difference between them is the spread. Traders can go long and short when speculating on the price movement of financial instruments—betting on whether the market will rise or fall. They can also use leverage depending on their brokers’ conditions.
So, how is spread betting different from CFDs? It’s quite simple: spread bets are free from capital gains tax and stamp duty. But it’s worth noting that CFD profits can be offset against spread betting losses for tax purposes.
Why Should Brokers Add Spread Bets to Their Platform
The main advantage for brokers is to expand and diversify their user base. For tax-sensitive clients, spread betting is an opportunity to forget about extra calculations so they can focus on their gains. It also enables traders to invest in diverse instruments and markets they haven’t been able to cover before.
Spread bets have always been popular across the UK and Ireland, so even bear markets couldn’t stop the influx of new traders that raised the demand for this instrument. Software providers take this into account when developing trading platforms, thus helping startup brokers introduce spread bets easily.
This is also the case with DXtrade. Brokers who already license DXtrade can ask Devexperts to enable spread bets along with FX and CFDs.
A major DXtrade advantage for brokers is the possibility to hedge client spread bet positions in the CFD market. This limits exposure to risk that spread bets might pose and ensures business continuity. Brokers can also B-book spread bet positions of selected client groups to increase business profitability.
The benefit for traders is that they need only one account for all instruments available in DXtrade. Traders can mitigate spread betting risks with stop loss and take profit orders.
Additionally, the Trading Dashboard widget is aimed at increasing traders’ engagement. It shows various metrics, including intraday performance, risk/reward ratios, win rates, and winning/losing trade holding times. Knowing these metrics helps traders assess their performance with different instruments and select the most suitable options.
Given the increasing trader interest in spread betting and its benefits, now is the perfect time to add spread bets to your mobile app. Devexperts can get it up and running in DXtrade in less than a week, granting brokers control of their mobile applications and providing 24/7 support.
